Track Your Business With a Dashboard

Even companies with good systems can get into trouble if they don’t manage their growth. To avoid this fate, Jim Kabel created a “dashboard” — a set of fundamental numbers that shows the monthly trends in their sales and production pipeline: leads, close rates, job profits, and customer satisfaction.

In January 2004, I left a good marketing job with a major electronics manufacturer to start a remodeling company in San Jose, Calif. When we opened our doors in January 2005, I had three employees. Four years later, we’ve grown to 19 employees and are doing $3 million in business — everything from two-hour handyman jobs to large remodels that last several weeks and sell for more than $100,000.

I credit much of the growth to our staff, who do high-quality work and take great care of customers. It also helped that, as part of the Case Remodeling franchise, we hit the ground running, with proven systems for sales, operations, production, and customer service.

But even companies with good systems can get into trouble if they don’t manage their growth. To avoid that fate, I created a “dashboard” — a set of fundamental numbers that shows me the monthly trends in our sales and production pipeline: leads, close rates, job profits, and customer satisfaction.

I pull reports from a couple of sources — QuickBooks, for example, and our in-house customer-management program. But it doesn’t matter what software you use or even if you log in the information by hand. The point is to track your numbers — I look at them a few times each week — and record them on the dashboard (see spreadsheet). The monthly totals show me where the business is going and where we need to adjust. Because I keep a close eye on these trends, I seldom have to make reactive decisions under stress. And in the long run, I make better decisions for my company.

This spreadsheet shows a sample dashboard for a hypothetical company projecting around $100,000 per month in business. It covers a six-month period and includes all of the categories the author uses.

The items we include vary slightly from year to year; some of them — leads, for example — are raw numbers, while others are percentages or dollar figures. In this article, I’ll go through the items one by one, explaining why I track them and how I use the information in my business decisions.

Marketing and Sales

This section of the dashboard tells me how successful we are at converting different types of leads, and whether we need to refocus our lead-generating efforts.

Total leads. This is a tally of how many leads we are getting from all sources: repeat customers, referrals, direct mail, print advertising, the Internet, and so on. At the beginning of each year, we set monthly lead targets. The dashboard tells me if we’re meeting them and how we’re doing compared with the same month last year. If the dashboard shows that we’re missing a target, I meet with the sales staff to figure out why.

Repeat/referral/networking leads. Repeats and referrals made up 33 percent of our leads last year. We decided we wanted to grow that number to 44 percent this year, so we started attending more networking meetings and stepped up our marketing to past clients. The effort has paid off: By late summer we were getting 45 percent of our leads from repeat customers and referrals. Although the number of leads has dropped since the bad economic news in September, the percentage of leads we’re getting from repeats and referrals hasn’t changed much.

Total sales. This is a dollar figure that tells me whether we’re hitting our monthly sales targets and how we’re doing compared with the same month a year ago. If we’re not hitting our targets, my salespeople and I revisit all leads that didn’t close. Sometimes it’s just a bad economy, while other times we might find that a salesperson is in a slump. The worst case is that we determine that a salesperson is in the wrong job. (We’ve let four salespeople go in four years.)

Other times we find that a lead source has lost its effectiveness. In the past, for instance, we received leads from matching services like ServiceMagic — as well from the Yellow Pages — but since most of those prospects were price shoppers, we decided to switch our focus to sources that bring higher-quality leads. That’s why we now put more attention on referrals and networking.